Case study · Wholesale and distribution · Cabinet and architectural hardware · 13 min read
Source: Pricing Insight engagement records: the client's pricing strategy (July 2026), customer and SKU analysis, and the Blackbird optimisation engine run on the twelve months to March 2026, reconciled to the management accounts. The A$4.0m and the gross margin rise are reported by Pricing Insight as realised; splits by band, category and customer are from the engine model. None is a benchmark for another business.
A$4.0m of gross margin a year, from prices the business already charged. Lincoln Sentry is a national distributor of premium cabinet hardware, drawer systems, lighting and related products, selling to about 9,859 trade customers, from one-off walk-up buyers to national accounts, on A$198.66m of revenue. Years of deal-by-deal decisions had left about 384,000 individually negotiated prices, discounts from about 1 per cent to 59 per cent with no consistent link to customer size, and the same item selling up to 60 per cent apart between comparable customers. Pricing Insight ran Project Blackbird on the full transaction record: a fair-value price-volume curve for every SKU, a segmentation of every named account, and a new price architecture of one national list price per SKU, one discount per line that deepens with customer size, and a published walk-up price that no customer pays more than. Released inside an increases-only rule and a cap of about 7.5 per cent per line, the new prices lifted gross margin from 33.6 per cent to 34.9 per cent, about A$4.0m in year one, realised. The model narrows the spread of prices paid for the same item from 26.4 per cent to 22.5 per cent.
| Client | Lincoln Sentry, a national distributor of premium cabinet hardware, drawer systems, lighting and related products to cabinet makers, builders and trade customers in Australia. |
| Service | Project Blackbird price optimisation: transaction analysis, fair-value pricing for every SKU, customer segmentation, price architecture, calibration options, the system specification for SAP, a pilot design and pricing governance. |
| Status | Realised. A$4.0m of year-one gross margin, reported by Pricing Insight as realised. A$4.16m of pricing below fair value (identified, overlapping the A$4.0m). Splits by band, category and customer are from the engine model. |
| Scope | A$198.66m of revenue, 9,859 priced customers, 24 product categories and about 384,000 customer and SKU price combinations, twelve months to March 2026. |
| Period | Pricing diagnostic in January 2026; optimisation engine and pricing strategy from May to July 2026; strategy review with management on 30 July 2026; pricing strategy session in Melbourne in August 2026. |
The brief
Replace discounts accumulated deal by deal with one structure the business can explain to any customer, and lift margin without losing the customers who matter.
01Lincoln Sentry: 384,000 negotiated prices and no common logic between them
Nearly 10,000 customers, five sizes of account, one price book. The business sells premium cabinet hardware, drawer systems, lighting, storage, sealants and decorative products to cabinet makers, kitchen and joinery fabricators, builders and trade customers. Margin is earned on invoice price less cost, and customers stay for range, availability and service. Of 13,544 customers on the master file, 9,859 bought priceable lines in the twelve months to March 2026, worth A$198.66m of revenue at a 33.6 per cent gross margin.
The margin gradient had the right shape. The smallest accounts, under A$5,000 a year, paid 44.9 per cent; the 597 accounts over A$75,000 a year paid 30.9 per cent and carried almost half the revenue. A distribution book should look like this, because bargaining power and cost to serve both fall with size. The problem sat underneath the averages.
Prices had been set one deal at a time for many years. Staff interviews in the January 2026 pricing diagnostic confirmed that the customer entitlement tiers were routinely bypassed, and that the discount a customer held bore no consistent relationship to its size. Website prices sat well above what customers actually paid.
02What the diagnostic found: discounts set by negotiation, not by size or volume
Three findings, one for each pillar of the Pricing Periodic Table.
Value
Customers of the same size paid very different margins. Customer size explained only about a quarter of the variance in customer margin, and two customers of the same scale routinely sat 10 or more margin points apart. Two segments of broad-range, committed buyers of similar size showed the gap most clearly: 1,442 strategic partners earned 38.0 per cent, while 1,075 loyal but under-priced accounts earned 29.0 per cent on A$52.57m of revenue, with no difference in loyalty to justify it. Customers who bought the widest range paid the same margins as narrow buyers of the same size, so their loyalty came from range, availability and service, not price.
People
Volume did not explain the discounts. The price-volume relationship fitted for every SKU showed that volume explained only about a tenth of the price differences within a SKU; doubling volume was worth only about 1.2 per cent off price at the typical item. The rest was negotiation. Discounts ran from about 1 per cent to 59 per cent, and mid-size accounts had negotiated their way to the same median discount as the largest accounts, 33.3 per cent off list.
Structures
About 384,000 prices, and no structure holding them. Half the range traded within a 21 per cent spread, but nearly one SKU in five traded at prices more than 40 per cent apart across customers, and the widest items approached 100 per cent. Measured against each product's own price-volume curve, so that discounts earned by volume were excluded, A$4.16m of pricing sat more than 10 per cent below fair value. A$1.71m of it was on items customers rarely price-check. Six categories, Louvre, Lighting, Connectors, Storage, Decorative and Sealant, gave away 4 to 6 per cent of their revenue below fair value, two to four times the rate of the healthy anchor categories.
Six priorities followed.
One national list price per SKU.
Set from the market: 1.5 times the median price paid by accounts spending over A$25,000 a year.
One discount that deepens with size.
Bigger customers always hold deeper discounts, so every relativity can be defended to any customer who compares.
A published walk-up ceiling.
No customer pays more than the trade-counter price, online or at the counter.
Protect the items customers compare.
Key value items are priced sharply and decide where deeper discounts open; everyday low price items hold.
Realign the loyal but under-priced.
Work the nine-point margin gap between two segments of the same kind of customer, with care.
Govern the exceptions.
A Pricing Council, three authority levels and exceptions that expire unless renewed.
03What Pricing Insight did: Project Blackbird, from transaction data to a governed price architecture
Five steps, each tested against the one before. The optimisation engine ran on every customer and SKU price in the twelve months to March 2026, reconciled to the management accounts, so the sizing reached management as a number Finance could recognise.
Fair value for every SKU.
A price-volume curve fitted for each item, so volume-earned discounts were separated from negotiated ones, and every named account scored on range breadth and margin against same-size peers.
One list, one discount, one ceiling. Every difference between two customers can be explained.
A discount ladder in three levels.
A category discount for every named account, with deeper sub-category and product-family discounts opening only where a customer concentrates spend in a group that holds key value items. Discounts never stack.
Five calibrations, one set of rules.
The options differed only in how firmly prices moved in year one: increases only, a cap of about 7.5 per cent per line, and a walk-up price about 9 per cent above current.
A system the business can run.
The price determination specified for SAP: one discount per order line, found most-specific first, with about 1,188 unreliable lines held at current price until their data is corrected.
Pilot first, then category waves.
Lighting proves the mechanics on a small category; Drawer Systems is the material test. The remaining categories follow in the order the fair-value evidence sets.
Governance was designed with the prices. A Pricing Council owns the rules, three authority levels decide exceptions, every exception carries a reason and an expiry date, and override spend is measured each month against revenue and in gross margin dollars. Rebates were deliberately deferred until the invoice price architecture settles.
04What changed: A$4.0m of year-one gross margin realised, with prices moving gently
A$4.68m of increases, less A$0.68m of corrections. Lifting under-priced lines within the cap adds A$4.68m of gross margin; bringing lines that sat above the new walk-up price down to the ceiling returns A$0.68m to customers. The net A$4.00m is 2.0 per cent of revenue and lifted gross margin from 33.6 per cent to 34.9 per cent, about 130 basis points. The result was realised.
Prices move gently. In the released model, the typical line moves 0.1 per cent and none moves beyond the cap. Seven in ten customers, 6,992, see a modest net increase, typically 1.6 to 2.0 per cent for named accounts; 1,010 see essentially no change; and 1,857, mostly small accounts previously charged above the new published price, end up paying less. The loyal but under-priced segment carries A$1.25m of the uplift, the most of any segment.
The spread of prices narrows in every category. Bandwidth, the spread of prices paid for the same SKU, falls from 26.4 per cent to 22.5 per cent across the book in year one, and by 8.7 and 8.2 points in Sealant and Decorative. About 384,000 negotiated prices converge on about 43,000 governed records, one for every nine carried before.
The pilot design put two categories first: Lighting at A$43,000 on A$2.2m of revenue and Drawer Systems at A$1.37m on A$74.2m, about A$1.42m modelled, with options up to A$3.26m. Range is a second, separate lever: customers missing categories their peers reliably buy leave A$13.27m of revenue and A$5.02m of gross margin unbought at the level of the typical comparable buyer, a growth pool that is never added to the pricing uplift.
Status: realised. Metric: gross margin, flowing to EBITDA. The A$4.0m year-one figure is reported by Pricing Insight as realised; it was sized line by line in the Blackbird optimisation engine on the twelve months to March 2026 and reconciled to the management accounts. Splits by band, category and customer, and the bandwidth figures, are from that model. The A$4.16m below fair value is an identified diagnostic reading that overlaps the A$4.0m and is recovered at each annual refresh, not added to it. Not independently audited.
05The Pricing Periodic Table elements this work built
Fourteen elements built in the price architecture and its governance, four identified for the next stage. The Pricing Periodic Table maps 61 elements of pricing capability in nine domains across three pillars: Value, People and Structures. Most of this work sits in the Price Architecture and Analysis and Processes domains; the next stage moves into the people who hold the prices in negotiation.
| Analysis | 46 Pm Price modelling, 47 Ps Price position and key value items, 44 Or Override and discount analysis, 08 Sg Segment and channel strategy: the optimisation engine, fair value for every SKU, key value items and the four customer segments. |
| Architecture | 49 Lp List price alignment, 50 Md Price-setting method, 51 Dt Discount structure and tiers, 52 Rl Price relativities and volume breaks, 54 Co Price corridors and exceptions: one national list, the three-level discount ladder, the walk-up ceiling and the 7.5 per cent cap. |
| Governance | 23 Pn Pricing council, 22 Rs Roles and decision rights, 61 Da Discount authority and controls, 48 Kp Price realisation KPIs, 57 Dq Pricing master data: the Pricing Council, three authority levels, expiring exceptions, monthly override measures and the data quarantine. |
| Next stage | 03 Vq Value quantification, 39 Ka Key-account negotiation plans, 28 Cc Commercial capability and training, 16 Rb Rebate and incentive design: customer value evidence and negotiation plans for the largest accounts, sales capability, and rebates once the invoice architecture settles. |
06Three lessons for a CFO
Measure the spread before the average
The book's 33.6 per cent gross margin and its margin gradient by size both looked right. The A$4.16m below fair value only showed when every SKU's prices were tested against its own price-volume curve, customer by customer.
Let size, not negotiation, set the discount
Volume explained about a tenth of the price differences within a SKU. A single discount that deepens with account size, with deeper levels only where spend concentrates, made every relativity defensible and cut 384,000 prices to about 43,000 records.
Move prices gently and in order
An increases-only rule, a cap of about 7.5 per cent per line and a pilot on two categories meant the typical line moved 0.1 per cent while the book gained about A$4.0m. Seven in ten customers saw a modest increase; one in five paid less.
07Questions this case study answers
How much gross margin can price optimisation add for a hardware or building products distributor?
At Lincoln Sentry, a cabinet and architectural hardware distributor, Project Blackbird realised about A$4.0m of year-one gross margin on A$198.66m of revenue, 2.0 per cent of revenue, lifting gross margin from 33.6 per cent to 34.9 per cent. A$4.16m of pricing also sat below fair value; it overlaps the A$4.0m and is recovered at each annual refresh. The result depends on how widely prices for the same item are spread across customers today.
How do you set one price list for thousands of B2B customers?
Set one national list price per SKU from the market, then one discount per customer that deepens with account size, with a published walk-up price as the ceiling. Here the list was 1.5 times the median price paid by accounts over A$25,000 a year, and deeper discounts opened only where a customer concentrated spend in a group holding key value items. About 384,000 negotiated prices became about 43,000 governed records.
How do you raise prices without losing large accounts?
Move prices gently, in a set order, and keep every relativity defensible. The model was increases-only with a cap of about 7.5 per cent per line, so the typical line moved 0.1 per cent and named accounts typically saw 1.6 to 2.0 per cent. Larger customers always held deeper discounts, the pilot ran on two categories first, and customers who bought the widest range were shown to stay for range and service rather than price.
Related case studies · Project Blackbird
How much margin sits in the spread of prices you already charge?
A first conversation covers your price file, how discounts reach the invoice and how many prices your team negotiates, and whether Project Blackbird fits. Ron Wood, +61 410 534 099.
Ron Wood is the Founder and Managing Director of Pricing Insight, an Australian pricing strategy consultancy he established in 2007. He has worked in pricing for around 30 years, first as a pricing and commercial manager in consumer goods, building materials and capital equipment, and since then across 160+ pricing engagements. He also founded Pricing University, which has trained more than 5,000 executives.
To discuss price optimisation for your business, contact Ron Wood at info@pricinginsight.com.au or on +61 410 534 099, or visit Pricing Insight.
Lincoln Sentry is a national cabinet and architectural hardware distributor. Figures are from Pricing Insight's engagement records: the pricing strategy (July 2026), the customer and SKU analysis, the Blackbird optimisation engine output of 22 June 2026 on the twelve months to March 2026, reconciled to the management accounts, and the strategy review of 30 July 2026. The A$4.0m year-one uplift and the 33.6 to 34.9 per cent gross margin are reported by Pricing Insight as realised and are not independently audited. The splits by band and category, the bandwidth reductions and the customer outcomes are from the engine model. The A$4.16m below fair value and the A$13.27m and A$5.02m range gap are identified and are not added to the A$4.0m. Figure 2 is a diagram of the method. No figure on this page is typical or guaranteed.
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